If the government cut expenditures during an expansion
a. it would have to raise the tax rate
b. it would tend to stabilize the economy
c. both a and b
d. neither a nor b
b
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A central bank commitment to a ________ rule for monetary growth can be conveyed by maintaining a ________ exchange rate
A) rigid, fixed B) rigid, flexible C) flexible, fixed D) non-inflationary, flexible
Suppose that your neighbor smokes in his yard. You can smell his cigarette smoke from inside your house, and you dislike the smell. Which of the following statements is correct?
A. There is no efficient solution to this problem. B. If it is difficult for you and your neighbor to negotiate with each other, then you may not be able to arrive at an efficient solution to this problem. C. Since your neighbor has the legal right to smoke in his yard, you will not be able to arrive at an efficient solution to this problem. D. It not socially optimal for your neighbor to smoke in his yard.